This is the company blog for megaventory, an online software that helps small businesses that buy, sell and manufacture physical products to manage sales, purchasing, manufacturing and inventory. We blog about new features and updates but also about enterprise software, small businesses, cloud computing and the industry in general.

Thursday, 1 December 2011

How would you choose ERP for your business?

Having asked ‘What is ERP’ and having shown what it can do, the question that comes naturally
is how to select which solution is right for my small business or
organization. The options are numerous and there is in fact an entire
business ecosystem around this specific question (consultants, resellers
and companies that help you decide and/or implement the solution for
you). It's a huge subject but we'll try to cover the basis to get you started.

Regardless
of the specific nature of your small business, there are a number of
criteria that you need to consider and apply in pretty much all cases.
So here’s what you should take into account as a small business owner.

Features: Obviously
whatever you choose needs to cover the basic aspects of your business
requirements. Your choice will be different if you want to make your
inventory management more efficient compared to handling better your
customers and sales leads - or if you want to improve how you work on
both fields. It’s important to prioritise your goals as most of the best
solutions out there -targeted to small and middle size business- also
focus on doing one or two things well. So, the feature set they offer
should match your goals as closely as possible. Note that having more
features than needed might sound like a good thing to have but, in
reality, it adds unnecessary complexity and increases the learning curve
(and drives hidden costs higher).

Data visualisation & export: Can
your ERP generate a printable report of all interactions with
customers, suppliers, affiliates etc? How about aggregate data graphs or
end of month/year reports? What level of detail can the ERP provide in
how your business works? Again, simplicity but also completeness in data visualization is key to understanding your business with a snapshot. Can you easily share
this information among employees? Also, if you decide to change systems
in the future is your information locked in the current ERP?

Usability: Perhaps
a make-or-break aspect is how easy it is to understand how the software
works in a glance. Do you and your employees have to undergo lengthy training to
learn and change the way they work? Or is the solution so well designed
that you’ll hardly ever need a manual? The abundance of solutions out
there makes this particular criterion potentially the decisive factor:
The ERP with the shallower learning curve usually prevails over the ERP
with the most features. This is true especially in very small
businesses.

Security: You’re
trusting your crucial business data somewhere that at least initially
feels foreign and you should be sure that proper encryption and security measures are in place where necessary. At the same time, security should
be as much as needed, it shouldn’t get in the way of usability and you
should ‘buy’ to the extent that you need it (e.g. there’s more reason
for it if you know that in the past a competitor has been after your
data)

Data import: It’s
important to consider - especially if your business has been running
for a few years now - how and to what extent will you be able to import
your existing information into the new system. This is a function of
what format your data are in currently, how well organised and easy to
process are and to what extent you’ll need to manually edit in order to
be able to start to actually work with them.

Maintenance: Once
the system is in place, it’s not the end of the story. You will not to
consider who and how much it will cost to maintain it and in what way it
can be upgraded to include further features or needs that will arise in
the future. Also, consider hardware equipment and additional licenses
you might need as well as what the backup scheme in case of disaster.
Hosted or Software-as-a Service solutions usually offer this out of the box so small
business owners do not have to deal with upgrades, maintenance and
installations. All is needed in the latter case is a web-browser and an
Internet connection.

Miscellaneous: Apart
from the above points there are a number of other details that are easy
to forget but can hugely limit your solution if left unchecked. Most
likely the system needs to support multiple currencies (e.g. in its
reports) or have product tracking capabilities. Furthermore, there might
be industry- or business-specific individual needs that must be covered
in your particular case. Finally, government or institutions might
require that certain regulations are met and a system that doesn’t
support them is of little use.

Cost: Of
course, once you have an idea of what you’re after, then comes the
issue of what it costs both to begin with but also in the long run.
Usually the core spend is a function of the users (or machines) the
software will be installed for but other costs may also be involved.

Another
important distinction is whether the ERP will be installed in your
computers or whether it should run on the cloud. We look at this issue in the next post but before that let us know in the comments if you feel there are there any other factors that should be considered before deciding on ERP.